Unless the card is dying (unlikely) it is probably the drivers. While I realize that you are running the most recent ones, try going back and trying the last two or three drivers, and trying Omega Drivers.
Do a complete graphics driver uninstall before installing the next set, just to be sure. I ws having a hound of a time with COD4 with my X1950XT, and it was drivers and overclocking (mine was crashing and locking up).
Once you rule out drivers, you can focus more on the rest of it. You PSU should be fine as far as wattage goes. But, like everything else, things eventually die. But I wouldn't go throwing money at it until you narrow down the possible suspects.